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Government was warned two years ago high immigration could affect housing costs



In a revelation stemming from internal documents, federal public servants alerted the Canadian government two years ago that surges in immigration could potentially lead to challenges in housing affordability and services. The warning, detailed in documents obtained through an access-to-information request by The Canadian Press, shed light on the concerns raised by Immigration, Refugees, and Citizenship Canada (IRCC) regarding the impact of immigration on the economy, housing, and services during the formulation of immigration targets for 2023 to 2025.


The warning included a cautionary note that housing construction had not kept pace with the rapid growth of the population in Canada. A slide deck emphasized the need for policymakers to comprehend the misalignment between population growth and housing supply, highlighting the role of both permanent and temporary immigration in shaping population growth.


Canada's aging demographics indicate that immigration accounts for nearly all population growth, making it a crucial factor. Despite this, the federal government made the decision to increase the annual intake of permanent residents to 500,000 by 2025, drawing significant attention and scrutiny. This move is expected to nearly double the number of permanent residents admitted in 2015.


The internal documents underscore that federal public servants were well aware of the challenges high population growth would pose to housing and services. Concerns were raised about the pressure on healthcare and affordable housing, with settlement and resettlement service providers expressing strain due to labor market conditions and increased immigration levels.


The impact on housing affordability has become a political concern for the Liberal government, with the Conservatives gaining momentum by focusing on affordability issues while avoiding the specific topic of immigration. Recent data reveals that Canada's population growth is setting records, driven by a historic influx of temporary residents, particularly through international student and temporary foreign worker programs.


Experts from various sectors, including financial institutions and academia, have warned that the robust population growth is exacerbating housing affordability issues, with demand outstripping supply. The Bank of Canada has echoed these concerns, with Deputy Governor Toni Gravelle cautioning that strong population growth is contributing to upward pressure on rents and home prices.


Public opinion polls indicate growing concerns among Canadians about the strain immigration is placing on services, infrastructure, and housing, leading to diminishing support for high immigration levels. The Liberal government, however, defends its immigration policies, citing economic prosperity and demographic considerations as justifications.


In response to heightened scrutiny, Immigration Minister Marc Miller has maintained the annual target of 500,000 permanent residents for 2026. The documents from 2022 highlight that Canada's immigration targets have surpassed the recommendations of some experts, including the Century Initiative advocating for a population of 100 million by the end of the century.


The focus is now shifting from permanent residents to the substantial increase in non-permanent residents, with a significant portion of population growth attributed to temporary residents between July and October. Concerns are rising about businesses relying on low-wage migrant workers and potential exploitation of international students by less reputable post-secondary institutions.


Economics professor Mikal Skuterud, a critic of the federal government's immigration policy, suggests that there appears to be a loss of control over temporary migration flows. He emphasizes the link between targets for permanent and temporary residents, suggesting that higher permanent immigration targets may incentivize individuals to come as temporary residents.


Skuterud challenges the narrative that high immigration is a panacea for Canada's economic growth problems, noting that it does little to increase living standards as measured by real GDP per capita. The documents further support this viewpoint, suggesting that while increasing the working-age population may positively impact gross domestic product, it has little effect on GDP per capita.


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